October 27, 2023 (MLN): The State Bank of Pakistan (SBP) issued the no-objection certificate to MCB Bank Limited (PSX: MCB) on Friday for establishing an exchange company in the name of MCB Exchange Company (Private) Limited.
On September 18, 2023, the Board of Directors of MCB approved the establishment of an Exchange Company with an initial paid-up capital of up to Rs1 billion.
The exchange company would be a wholly owned subsidiary of the bank.
This development comes after the SBP introduced reforms for the banks engaged in foreign exchange business to establish wholly owned Exchange Companies (ECs) to cater to the legitimate foreign exchange needs of the general public.
This action taken by the central bank comes in response to various regulatory issues that have been observed in the operations of ECs.
With this initiative, the SBP aims to consolidate and transform various types of ECs into a single category with a well-defined mandate.
In addition to MCB, certain banks including, Bank Alfalah Limited (PSX: BAFL), Allied Bank Limited (PSX: ABL), Bank AL Habib Limited (PSX: BAHL), Meezan Bank Limited (PSX: MEBL), and United Bank Limited (PSX: UBL), have decided to establish their own exchange company.
